Editor’s Notes: From pumps to plugs

By David HorovitzDecember 19, 2008

The Obama administration may be poised to set off an electric car revolution, based on Israeli brainpower

Idan Ofer was showing off his Better Place company’s electric car to the visiting Austrian president, Heinz Fischer, outside the Dan Panorama hotel in Tel Aviv earlier this week. To Ofer’s complete surprise, the Austrian head of state ‘broke all the rules,’ set aside such trifling considerations as security and insurance, and insisted on taking the vehicle for a spin.

‘He simply took off,’ Ofer reports in a telephone interview, chuckling broadly down the line.

Which is precisely, Better Place’s Chairman Ofer suggests, what is now happening to the whole electric car project. By his telling, it is an idea whose time has come, a revolution that, like the Austrian leader, is simply taking off.

Though he’s keeping some of his cards close to his chassis, Ofer cautiously reveals that the nascent Obama administration ‘is closely monitoring Better Place and may be adopting it.’

That’s a staggering revelation, one that promises a fundamental overhaul of global private transport. But the inherent logic is unarguable.

Electric car technology has now reached maturity. Renault-Nissan, the pioneering manufacturing partner for the innovation of Better Place’s founder and CEO Shai Agassi, will be mass producing hundreds of thousands of the electric-powered vehicles by 2010, Ofer says. The vehicles will cost about the same as conventional cars for now, but will ultimately be cheaper. They have comparable acceleration. They can reach comparable speeds (of 150 to 180 kph). And they can run 150-200 kilometers on a single battery, using hardly any power when idling in traffic (unlike their gas-guzzling predecessors).

Better Place is uniquely capable of overseeing the integrated system that enables them to operate, Ofer says. Barely a year after it was founded, with $200 million of venture capital, it is geared up to establish vast networks of the plug-in ‘charging spots’ at which the cars refuel with their electric oil, and the battery swap stations that will ideally supersede today’s gas stations.

The State of Israel is an enthusiastic partner, committed to the widespread deployment of an electric recharge grid to power vehicles by 2011. Denmark and Australia are on board. Earlier this month, the Japanese government invited Better Place to work with its local car manufacturers on a first electric car venture. Last week, the state of Hawaii announced it was driving up, too. The French ‘say they are with us,’ Ofer reports. ‘They want to be the first and the most innovative.’

Sample ‘charging spots’ are on display in the parking lot at Cinema City, north of Tel Aviv, and in London. Next year, more will be deployed, and many more in 2010, by which time, says Ofer, ‘we’ll be selling real cars to real people.’

AT THE same time as such practical progress is being made, critically, the imperative that is driving a change to electric cars has never been more obvious or more urgent.

On a planet whose responsible leadership and activists are unprecedentedly conscious of the environmental damage we foolish, selfish humans are wreaking, the electric car is a nonpolluter, with zero CO2 emissions.

In a Western world anxious to reduce its dependence on oil supplies from unfriendly countries, the battery car is a veritable panacea.

And then there’s the small matter of the global financial crisis, snowballing just as the change-oriented Obama administration prepares to take office.

Obama’s key priority will be to begin healing the American economy, to invest in new infrastructures, to create new jobs. Most pertinently for this venture, he’s also grappling with an antiquated car-building industry on the brink of collapse and pleading for bail-outs. But just doling out money to Detroit, Ofer suggests wryly, paraphrasing a recent adulatory Thomas Friedman article in The New York Times, would be like propping up the typewriter industry in the age of the PC, home printer and Internet.

‘Our way,’ enthuses Ofer, a former head of the United Mizrahi Bank, ‘is the only way.’

What Agassi is doing with electric cars, he adds, citing another of Friedman’s parallels, is much like what Steve Jobs of Apple has done for music – recognizing the astounding potential of new technologies, and harnessing them for a radically fresh means of providing mobility. As Friedman put it with his Steve Jobs simile, ‘It just takes the right kind of auto battery – the iPod in this story – and the right kind of national plug-in network – the iTunes store – to make the business model work for electric cars at six cents a mile.’

Ofer is anticipating ‘the electrification of America’ as Obama’s logical instrument for achieving change, promoting environmental responsibility, enabling reduced oil dependence and underpinning economic revival. ‘This is very dear to the heart of the Obama administration,’ he says. ‘Just look at who Obama has chosen as energy secretary – Steve Chu. He knows his stuff. He’s a huge advocate of alternative energy. He says we must get away from oil…’

Indeed so. Obama has promised to spend $150 billion on alternative energy over the next decade, and says he selected Chu, who won the 1997 Nobel Prize in Physics, as ‘uniquely suited’ to steward the necessary innovations. At California’s Lawrence Berkeley National Laboratory over the past four years, according to US News & World Report, Chu has backed research into advanced biofuels, solar power and energy efficiency, and fought shrewdly for funding from the federal government and private industry. Last year, he persuaded oil giant BP to sign onto a $500m. partnership for alternative energy research. In short, the magazine concluded, he’s ‘a scientist who can find common ground with industry.’

The incentive to shift away from those kinds of numbers is overwhelming, given the economic crisis, the environmental imperatives and the unsavory regimes this spending supports. And that’s plainly where President-elect Obama is heading.

So listen up, Ofer says, for announcements from the new administration about reviving Detroit with electric cars, job creation in battery factories, modernizing the national electricity grid. ‘And when you hear those announcements,’ says the Better Place chairman, ‘you’ll know that it will have come from us.’

While Renault-Nissan took the pioneering plunge 18 months ago, some of the American car manufacturers have been highly resistant, he acknowledges. ‘I understand that. Some of them didn’t believe in this. Others wanted some kind of hybrid. But now all serious car manufacturers recognize it’s going to happen. It’s the only way.

‘Some of these firms are dysfunctional,’ he says with blunt cheerfulness. ‘I’ve had meetings where the top executives said ‘No’ to us, and the subsidiaries said ‘Let’s do it.” But the inescapable truth, he insists, is that these companies are using yesterday’s technology, and they are gradually internalizing this, in a process that is being catalyzed by their financial predicament. Significantly, says Ofer, ‘in the last few days, one of the big US manufacturers, which had been resistant, told us that he was putting together a team and planning an announcement.’

Simply put, he notes, if the incoming president says ‘this is what we want you to do, and that way you’ll stay in business’ – and there’s a very serious possibility of Obama saying precisely that – then that’s what they’ll do.

BETTER PLACE, Ofer stresses, doesn’t make the cars. It has, rather, produced the integrated system for their operation. ‘We set up the charging spots, which look like little parking meters,’ he says. ‘We set up the battery swap places, generally in gas stations.’ And the firm makes its money, of course, by running the network.

‘Better Place’s model means consumers subscribe to transportation as a service, much like they do today with mobile phones,’ the company’s Web site explains. ‘Auto companies make the electric cars that plug into the Better Place electric recharge network of charging stations and battery swap stations. Energy companies provide the network’s power through growing renewable energy projects. And Better Place provides the batteries to make owning an electric car affordable and convenient.’

Better Place is ‘uniquely advanced in this,’ Ofer claims, noting that Agassi is a former systems integrator for Germany’s SAP software firm. ‘It’s not so easy to put down 500,000 charging spots across Israel by 2011. In Tel Aviv for example, the mayor likes the idea. But it’s complicated. There isn’t a lot of parking space under buildings, so our charging spots will be in the streets, where there’s not much room either. Do you keep such spots exclusive for electric cars? Like I said, it’s complicated.’

Better Place’s ‘e-mobile’ drivers will charge up at home, in the office, or on the street. ‘But we’re not talking about simply plugging in, like a milk cart,’ he says of the sophisticated powering process. Rather, there will be options – cheaper and more expensive packages, prioritizations, different rates for charging at different times of day. ‘Somebody might have a cheaper option where they only want to be charged during the night… These kinds of options are very good for the national electricity grid because they spread demand more efficiently.’

By next year, the company expects to have a major visitor center open here to promote the technology. ‘Already, the Foreign Ministry is telling us that most every foreign delegation wants to visit Better Place, that it’s the biggest innovative draw in Israel.’

‘Imagine the Israel of 2011 is flooded with electric cars,’ he urges. ‘Your conventional car will be worthless. There’ll be a natural migration to electric cars.

‘Now remember,’ he goes on, ‘the average car in Europe is replaced every eight years.’ Governments will increasingly be offering incentives to drive and park electric cars. ‘Of course they will. It gives them silent cities, unpolluted cities. Think of the savings in public health costs as a result of the reduced pollution.’

And the more that people see that it’s real, he says, ‘the more research resources they will devote to improving the technology even further.’

Hopefully, he adds, there will be an intensifying push to generate the electricity from alternative energy sources, too: Better Place was reported earlier this year to be planning a vast solar energy field in the Negev for the purpose.

Ofer concludes with the assertion that even the least enthusiastic players are gradually being drawn into the electric era. Until recently, he says, the powerful German manufacturers were taking the view that their industry was just fine. ‘German car executives are very influential. They are not geared up for this. They are the most resistant,’ he says. ‘But now I’m even feeling a shift from negative to positive there. And the moment the US shows signs of going electric, they’ll turn around completely.’

About David

David Horovitz is the founding editor of the online newspaper The Times of Israel.

He was previously the editor-in-chief of The Jerusalem Post, Israel’s English-language daily, before stepping down in July 2011 after almost seven years, and editor and publisher of the award-winning newsmagazine The Jerusalem Report.